How does it work?
The Proof of Work mining system is made up of a series of highly complex algorithms and mathematical calculations designed to be solved by those people, the miners, who want to participate in a particular blockchain network by solving the blocks that make it up.
These blocks can only be solved using a very high computational calculation, which is carried out using specialized machines that miners purchase only for this purpose. They allocate their work capacity to mining blocks, which is nothing other than calculations and operations.
Once a block has been calculated, those first people or miners who have managed to achieve it receive a reward for having dedicated time and effort to it. This being the engine that makes more and more miners participate in these networks.
However, the difficulty of obtaining a benefit with the calculation of blocks also increases as new people join the task and, therefore, it is more difficult to be the first to find the solution.
Another way in which complexity is increased is if, for example, the cryptocurrency itself has a limited amount of availability, as in Bitcoin.
As fewer blocks remain to be discovered, the difficulty increases, and the rewards that can be obtained globally decrease drastically. That makes it difficult to be among the first to achieve the calculation that solves the problem planted on every occasion.
Concept of a 51% attack:
Blockchain technology, since its inception has had a weakness by design that its developers seek to avoid, it is called a 51% attack. This attack allows one or more malicious agents that control at least 51% of the network to do what they want with it.
There are no limits to the actions you can take on the blockchain. They are the majority and as such, they can rewrite or even carry out a DoS attack on the network.
What consequences can a 51% attack have?
Firstly, such an attack would allow the attacker to obtain the most mining rewards on the net. This is because it controls most of the mining power, and therefore the system will reward you proportionally.
Another case that may take place is the attacker’s ability to perform double-spending attacks. That is, the ability to modify the history of the blockchain to recover spent coins and can spend them again.
These first two actions are the main reasons to control most of the mining power of a blockchain. They allow you to make completely dishonest profits and no one can stop you from that goal.
However, it would be easy to detect such an attack, and therefore although the attacker would have short-term profits, the loss of confidence by other players in the system to the blockchain attacked would result in an undeniable loss of value of the attacked market, which would ruin the attacker’s profits without removing the very significant costs involved, and this would make such an attack less worthwhile. It is for these reasons that this protocol is considered safe.
Here in the following overview we have compiled our Top 10 PoW coins:
1. Bitcoin (BTC):
It is by far the most well-known cryptocurrency and has the highest market value. Created in a white paper signed with the pseudonym Satoshi Nakamoto, it was the first virtual currency in the world.
Since the price of Bitcoin is too high to allow for smaller payments, each unit is divisible into a fraction of up to one hundred million (0.00000001) – The so-called Satoshi.
The current Hashrate is 103.12 EH/s and the average reward per block mined is 6.25 units.
2. Ethereum (ETH):
While bitcoin was created to be used exclusively as currency, the idea behind Ethereum is different: creating a system for blockchain applications.
Its platform was designed to be able to encompass smart contracts, tokens, and other cryptocurrencies. The idea was published in 2013 and the system started working in 2014, headed by the Ethereum Foundation.
The current Hashrate is 190.57 TH/s and the average reward per block mined is 2 units.
3. Bitcoin Cash (BCH):
Bitcoin cash was created in 2017, out of a process called fork – a division in the Bitcoin mining community. The Bitcoin Cash system is like an update to the mining program. Those who agreed with the changes did the update and became part of the new community that emerged.
Bitcoin cash brings some technical changes to its structure. The main one was to increase the virtual size limit for each block, which allows more transactions per block, resulting in faster transactions and lower transaction fees.
The current Hashrate is 2.74 EH/s and the average reward per block mined is 12.5 units.
4. Bitcoin SV (BSV):
Bitcoin SV is one of the projects resulting from the original bitcoin code. Thus, it arises from a fork in the blockchain of another forked cryptocurrency: Bitcoin Cash. And although it is a project based on BTC, it has several fundamental changes that change the methodology to mine it and store the information in its blockchains.
Bitcoin SV is mineable crypto using PoW system which was started on 5November 2018 and that is using the SHA-256 algorithm.
The current Hashrate is 1.78 EH/s and the average reward per block mined is 6.25 units.
5. Litecoin (LTC):
Litecoin was one of the first alternatives to Bitcoin. Developed by Charlie Lee in October 2011, the coin brings changes that were intended to make it more accessible – in theory, it is easier to mine.
Another important difference is that transactions on Litecoin are validated, on average, in two and a half minutes. The unit limit is 84 million.
The Litecoin market is smaller than that of bitcoin, but the protocol still bears many similarities to the first cryptocurrency. For this reason, Litecoin is often used as a “laboratory” for changes and improvements in the network.
The current Hashrate is 234.86 TH/s and the average reward per block mined is 12.5 units.
6. Monero (XMR):
Monero is a leading open-source currency focused on private transactions and resistant to censorship.
It’s Proof of Work (PoW) algorithm is CryptoNight. It is an algorithm that will shortly change to RamdonX to make it resistant to ASICs and FPGA.
Among its main features are hidden payments and transactions.
The difference between it and bitcoin is that Monero creates a unique address for each transaction, with a private password that allows only the person who received the depositor who has the password to have access to the complete information of the process.
The current Hashrate is 1.36 GH/s and the average reward per block mined is 2.5 units.
7. Ethereum Classic (ETC):
Based on the Ethereum system, the Ethereum Classic (ETC) platform is an improved version of its origin, where transactions can be carried out in a decentralized and freeway. Also, it is a collaborative platform where anyone can contribute.
Regarding its structure, Ethereum Classic is organized into nodes made up of clients that are also servers (with a total of 34,442 nodes). It uses the type of SHA3 algorithm based on PoW and its operation is similar to that of Ethereum, allowing the creation of distributed applications (DApps) and smart contracts.
The current Hashrate is 7.53 TH/s and the average reward per block mined is 3.20 units.
8. Dash (DASH):
Dash is open-source crypto. It is an altcoin that was forked from the bitcoin protocol. Also, it is a decentralized autonomous organization that is run by a subset of its users. It is called “Masternodes”.
The operations carried out with this currency have almost instant confirmation, carried out by the Masternodes network, which allows transactions to be anonymous.
The current Hashrate is 5.51 PH/s and the average reward per block mined is 4 units.
9. Zcash (ZEC):
Zcash is presented as nothing as the brightest and most impressive digital currency in the history of cryptocurrencies. Its success is mainly based on Zcash’s emphasis on protecting the privacy and identity of its users.
Zcash mining is based on the network of computers spread across the globe that “mine” to find blocks and at the same time validate transactions and secure the network.
For each work performed, a miner can obtain ZECs as a reward for the resources loaned: 50 Zcashs are issued every 10 minutes with an interval between blocks of 2.5 minutes.
Since Equihash is Zcash’s algorithm (PoW), intensive memory usage, and a powerful computer are required to run it.
Current Hashrate is 4.94 GH/s and the average reward per block mined is 6.25 units
10. DigiByte (DGB):
DigiByte is a UTXO PoW based blockchain, focusing on cybersecurity, payments, secure communications, and digiassets technologies.
It is an open-source blockchain that was created in the year 2013 and was released in 2014 by its founder Jared Tate. The network of DigiByte is based on 3 layers: Customizable tokens, Decentralized applications (DApps), and smart contracts.
Its 5 mining algorithms is its unique factor – Scrypt, Qubit, Sha256, Odocrypt, and Skein. Its advanced difficulty adjustment aims to keep the blockchain secure and protect it from malicious attacks.
Current Hashrate is 201.06 PH/s and the average reward per block mined is 629 units.